24 C.F.R. § 5.609
§ 5.609 Annual income. (24 CFR Part 5)
Operative Text
(a) Annual income includes: (1) The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services; (2) The net income from operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations; (3) Interest, dividends, and other net income of any kind from real or personal property; (4) The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a periodic amount (except as provided in paragraph (c)(14) of this section); (b) Annual income does not include: (1) Income from employment of children (including foster children) under the age of 18 years; (2) Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone); (3) Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlements for personal or property losses (except as provided in paragraph (a)(4) of this section);
Under 24 CFR Part 5 § 5.609, federal housing programs use a specific definition of 'annual income' to determine a household's eligibility and rent contribution. Broadly, annual income includes most forms of regular earnings and periodic payments—such as wages, business net income, investment returns, and Social Security benefits—before deductions. However, certain receipts are explicitly excluded, including income earned by children under 18, foster care payments, and one-time lump-sum additions like inheritances, insurance settlements, or capital gains.
Plain English — not legal advice.
Property owners and managers participating in federal housing assistance programs governed by 24 CFR Part 5 § 5.609 generally calculate tenant income by capturing all regular compensation and periodic benefit streams while carefully excluding the categories the regulation carves out. Compliant operators typically document each income source separately, noting whether business income is reported net of allowable straight-line depreciation rather than capital expenditures. Keeping clear records of excluded items—such as foster care payments or lump-sum settlements—helps support accurate certifications during HUD reviews or audits.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 24 CFR Part 5 § 5.609, tenants in federally assisted housing have a right to have their income calculated according to this specific federal definition, which excludes items like a child's earnings, foster care payments, and one-time lump sums such as an inheritance or insurance settlement. If a household believes its income was calculated incorrectly—for example, if an excluded item was counted—tenants can generally raise that concern during the certification or recertification process with the housing provider. Tenants may also contact a local tenant-rights organization or HUD's Office of Fair Housing and Equal Opportunity to understand available complaint or grievance pathways.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 6, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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